FINANCE AND ADMINISTRATION INDUSTRY
TRAINING ADVISORY BODY LTD.
SUBMISSION TO THE INQUIRY INTO THE AUSTRALIAN
FINANCIAL SYSTEM
JANUARY 1997
DEVELOPING THE SKILLS AND CAPABILITIES OF THE
WORKFORCE IN THE FINANCE INDUSTRY.
FAITAB SUBMISSION TO THE INQUIRY INTO THE
AUSTRALIAN FINANCIAL SYSTEM
JANUARY 1997
EXECUTIVE SUMMARY
We welcome this opportunity to present our views to the inquiry and suggest how
organisations such as ours can play a key role in managing and facilitating the on going process
of professional skills development and upgrading, as well as creating a workplace culture
which embraces continuous change and improvement.
We feel it is essential to ensure that the recommendations stemming from the current review of
the Australian financial system take into account other issues that impact on the performance
and capability of that system. Issues such as the professional and personal needs of people
within the system. The impact that changes will have on the skill levels, qualifications,
education and training needs of the workforce and how those issues are to be addressed should
also be considered by the review committee.
The central argument of our submission is that there is an urgent need of an industry wide
emphasis on investing in and developing the skills of the workforce to ensure greater long term
productivity and to better meet the needs of customers in domestic and international markets.
The only way to achieve this is through a consultative framework including governments,
regulatory bodies, industry, unions and training providers. This framework however, does not
need to be established from scratch. Organisations such as ours have already been tasked by
the Federal Government to establish a training and assessment framework for industry. Similar
frameworks established for industries such as tourism have already proven to be successful
both here and overseas.
RECOMMENDATIONS
1. That any inquiry into the financial system should look beyond the short term, expedient, or
profit motivated pressures for financial deregulation.
2. There is an urgent need for an industry wide emphasis on developing the educational,
professional and ethical skills of the workforce.
3. A commitment to and investment in the skills and capabilities of the workforce will ensure
greater long term productivity, flexibility and responsiveness to customer needs.
4. Such skills development must encompass industry nominated professional and ethical
standards, competency based training centred on nationally endorsed competency standards,
uniform assessment and a consultative framework involving all relevant parties.
5. That this professional and skills development framework be an essential requirement of the
financial system, irrespective of the regulatory model within which it operates.
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Overview
As most of us are aware, the Finance industry has been undergoing fundamental and wide
reaching change in recent years and this will undoubtedly be a feature of the industry well into
the next century. Deregulation of the banking sector, devaluation of the Australian Dollar,
technology and greater (and more sophisticated) customer demand have sparked these changes
which have resulted in opening up Australia as an international market and opening up foreign
markets for Australian enterprises. A consequence of this has been increasing competition for
a share of the local market by Australian and foreign organisations, while Australian enterprises
are also competing and expanding into global markets.
It is widely anticipated that following the current review of the Australian financial system,
further deregulation and competition will be inevitable. This will herald exponential change
and greatly increase the need for retraining and reskilling of the workforce to international best
practice standards. In sectors such as Banking, Insurance and Retail Finance, new skills and
knowledge will be needed in areas such as cross-selling, marketing, advertising, contract
management, credit management and risk assessment. In addition, greater and more
sophisticated skills will be required in traditional areas such as customer service and
information technology.
Greater competition for markets, continuing deregulation and advancements in technology will
lead to a greater blurring of boundaries and the convergence of services and products by
various sectors and organisations within the Finance industry. Increased competition will
continue to see the emergence of new occupations in areas such as financial, contract and
credit management as well as credit/risk assessment.
Added to the competition and blurring of boundaries, staff mobility is increasing as workers
move across the various sectors seeking better career opportunities or as a result of
organisational restructuring and rationalisation. As a result, there is a critical need for an
industry relevant training system which gives new entrants and existing workers a common
core of skills and knowledge which is nationally recognisable and portable, to enable them to
work across the industry.
Given the scope and magnitude of such changes to the financial system, it is imperative that
the current inquiry look beyond short term, politically expedient, process or profit centred
approaches to deregulating the Australian financial system.
The Finance and Administration Industry Training Advisory Body Ltd.
The Finance and Administration Industry Training Advisory Body Ltd.(FAITAB), is the
national voice of the Finance, Administration and Business Services industry to governments
on the Vocational, Education and Training (VET) needs of these industry sectors. In addition,
we have a network of affiliated bodies in all states and territories who respond to the needs of
enterprises at local and regional levels.
Industry Training Advisory Bodies (ITABs) like ourselves were set up under the direction of
Commonwealth and State Ministers for VET and are tasked with consulting widely with the
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industries we represent and reporting to the Commonwealth on the strategic education and
training needs and priorities of those industries. As part of this role, we are required by
Federal and State Governments to research and map the sectors within our industry coverage
and develop all encompassing, “complete”training packageswhich are relevant to and
endorsed by industry.
These training packages comprise:
• industry relevant and endorsed national competency standards which are flexible enough to
respond to broad industry or specific enterprise needs, as well as drive those needs;
• a framework of advice to industry on guidelines for skills assessment, recording and appeal
arrangements, assessment instruments; and
• uniform, portable, national qualifications based on industry endorsed national competency
standards.
In addition, training packages are supported by:
• learning strategies in the form of teaching and learning materials and information on
accreditation and credit transfers;
• professional development materials for training provider staff, industry personnel and skills
assessors;
• a nationally recognised “skills passport” which records and recognises the complete history
of an individuals’ attainment of skills and competencies.
National industry endorsed competency standards have already been developed and are
maintained by FAITAB for the insurance, personal trustee, purchasing and materials
management and professional accounting sectors. Competency standards for the Retail
Financial Services Sector (RFSS), mid level Accounting, Conveyancing, Workers
Compensation and Records and Archives sectors are under development and are nearing
completion. In addition, under the auspices of and with support from the industry, FAITAB is
developing an assessment framework for the insurance industry.
International Collaboration
We recognise that in this age of increased competition, our workforce must have World Best
Practice skills and training in order to be truly competitive. As a result, we consult and
collaborate widely with international industry bodies, training authorities and other
organisations to ensure that the ‘products’ we develop are at World Best Practice standard.
The Accounting and RFSS standards projects are being developed in collaboration and with
input from international organisations. The New Zealand Society of Accountants and the New
Zealand Qualifications Authority are participating in the project which will ensure commonality
of standards and mutual recognition in both countries. Similarly, input into the RFSS project
has been received from organisations in New Zealand, the UK and Germany.
To ensure a training system that is at World Best Practice standard and to ensure that
Australia remains internationally competitive, all competency standards will in future have to
be international in dimension and focus.
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Finance Industry Training Package
All these inter related projects form the foundation of an industry wide training package that
FAITAB is currently developing. The package provides a cohesive and integrated training
model that meets industry and employee needs because it provides for generic core skills, as
well as specialist skills in various industry streams.
The objectives of the project are to:
• develop a comprehensive, integrated training package for the entire industry which
combines the various Retail Finance, Insurance and Trustees sectors and streams - covering:
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− Credit Unions,
− Building societies,
− Cooperative Housing societies,
− Friendly societies,
− Mortgage lenders,
− Finance Companies,
− Life and General Insurance,
− Workcover,
− Funds Management,
− Personal and Superannuation Trustees;
combine outcomes of current projects involving competency standards and assessment
framework development into the training package;
incorporate industry nominated professional and ethical standards;
develop common processes across the different industry sectors;
develop strategies to promote and implement the training package with industry and
providers.
In addition, this project will also address the urgent requirements of industry, enterprises and
regulatory bodies for national standards and uniform learning strategies in the vital area of
credit management and financial risk assessment. A similar package for the Accounting
industry is planned to commence later this year.
Initiatives such as this have a two fold purpose. They match the needs of industry for a
national, uniform and consistent training system based on industry nominated professional,
ethical and competency standards. Additionally, they meet the needs of the workforce for a
training system that is nationally consistent, is competency based and has skills and
qualifications outcomes which are portable and nationally recognised.
Benefits To Industry
The development of a national, uniform training system which matches the needs of industry
and the workforce and is at World best practice standards, will ensure that:
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• the industry remains internationally competitive,
• there will be a commitment to the on going development of the skills and capabilities of the
workforce,
• the workforce will have professional, educational and training skills that are flexible and
portable across the industry nationally and internationally,
• the workforce will be more flexible and better able to respond and adapt to internal and
external change,
• employee security and satisfaction will ensure long term benefits in term of productivity and
responsiveness to customer needs.
Organisations such as FAITAB are ideally placed to play a key role in the development of
such a training system. As stated previously, we were established by the Federal Government
to coordinate and implement national training systems in collaboration with industry.
The benefits to industry, regulatory bodies, the workforce and governments of independent
industry advisory organisation such as ours include:
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concentration on industry required core competencies;
competitive neutrality;
cost effectiveness;
flexibility;
transparency and accountability;
tailoring products to suit user needs;
strategic relationships with industry, government, enterprises, unions and training providers;
collaboration with international training authorities and organisations to ensure World Best
Practice;
• Effective and efficient product development and distribution channels;
• creating a workplace culture which embraces continuous change.
The primary role of ITABs such as FAITAB is the development of an industry endorsed,
competency based training system involving:
• Teaching and learning through strategies and materials that are relevant as well as
innovative and flexible in delivery
• Competency based assessment of skills and knowledge that is
− uniform nationally,
− leads to qualifications and outcomes which are nationally recognised and portable,
− is auspiced through qualified, registered training providers or industry assessors.
Underpinning all of this are nationally endorsed industry and enterprise competency standards
which are the benchmarks for assessment, skills recognition and national qualifications.
As stated, our core business is to work closely with industry in the development of industry
relevant and endorsed competency based training systems underpinned by nationally endorsed
professional competency standards. These national standards are designed to be flexible and
can be adapted or tailored to suit the needs of industry generally, or of specific enterprises.
They should be flexible enough to respond to, as well as drive any future needs.
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Standards provide clear, unambiguous descriptors of skills, competencies and knowledge
required and are invaluable Human Resource management tools for recruitment, training and
professional development and for establishing career pathways. Standards are also essential
for skills assessment and recognition of national qualification outcomes through a national,
industry endorsed, transparent process.
This process underpins the national insurance industry assessment framework currently under
development by FAITAB. When operational, this framework will become the model for the
rest of the Finance industry.
In addition to developing standards, assessment frameworks and guidelines, ITABs are also
involved in developing new, self paced, interactive teaching and learning strategies and
materials that are relevant and flexible. Further innovation in product development and
delivery is constantly examined and evaluated. Methods of accessing channels of delivery such
as the Internet and other multimedia sources are being explored.
ITABs are separately incorporated companies limited by guarantee with a bipartite Board of
Management comprising employer groups, industry associations, small business, training
providers and unions (FSU and ASU in the case of FAITAB). In addition, we have a network
of affiliated bodies in all states and territories who respond to the needs of enterprises at local
and regional levels.
We are funded by government and industry, are nationally accountable to the Federal
Government and industry and are not involved in training delivery. We are therefore not a
threat to, or in competition with industry groups or associations. Being completely neutral,
our role is to work collaboratively with industry and enterprises to ensure that their education
and training needs and priorities are met. Being small, independent and non profit companies
funded by government, ITABs are extremely cost effective.
Industry is involved in all aspects of our activities and all projects are overseen by steering
committees nominated by industry. We are also required by the Federal Government to submit
regular progress reports. Being an incorporated company we must report to the ASC and,
being funded with public monies, we must also report to government. We are therefore
accountable on several levels and all of our activities are transparent and open for scrutiny.
Organisations such as ours are also flexible and can quickly respond to meet the needs of our
clients. The assessment framework currently being developed for the insurance industry
stemmed from the requirement by the Insurance and Superannuation Commission and the
Australian Securities Commission (ASC), for a uniform code of practice and the need for
ongoing assessment of knowledge, skills and ethical attitudes of people providing financial
advice. Similarly, the development of uniform standards for credit and risk management arose
from a need identified by industry, enterprises and individuals and was supported by regulatory
bodies such as the Australian Financial Institutions Commission (AFIC).
By conducting widespread briefings, workshops and forums as well as via newsletters, research
papers and other media, we are able to keep people in industry advised of issues affecting the
national training framework. The process of ongoing review of standards, training materials
and methodologies encourages a workplace culture which embraces continuous change.
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Similarly, by extensive consultation with industry, enterprises, regulatory bodies and unions
and through conducting on going research and mapping the various sectors, we are abreast of
the key needs, priorities and continuous change affecting industry.
Irrespective of the outcomes of the current inquiry into the financial system or the regulatory
framework that will eventually govern the system, we believe that it is fundamentally important
for any such framework to ensure that on going professional and skills development of the
workforce is a central requirement.
SUMMARY
There is an urgent need for a national, uniform, industry wide training framework to develop
the professional, ethical, educational and training skills of the workforce.
Industry associations, enterprises, the workforce and existing regulatory bodies have indicated
support for this system and have expressed their requirements with respect to the outline and
approach of such a framework.
Irrespective of the regulatory model within which it operates, commitment to the professional
and skills development framework must be an essential requirement of all parties of the
financial system. This has been the case with other countries overseas and with other
industries within Australia.
This skills development and training framework must incorporate industry nominated
professional and ethical standards, competency based training centred on nationally endorsed
competency standards, training methodologies and assessments and a consultative process
involving all relevant parties.
The training framework must be international in scope and focus to ensure that the Australian
workforce is trained at World Best Practice standards in order to remain internationally
competitive, flexible and responsive.
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